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  • ⚡️ Robinhood Crushes Earnings

⚡️ Robinhood Crushes Earnings

+ Reddit Shares Tumble As Growth Slows + Inflation Isn’t Taking the Hint So the Fed Won’t Either

February 12, 2025

Good afternoon! James Howells is still on a mission to recover his lost Bitcoin stash—now worth over $700 million—by buying the landfill where he believes his hard drive is buried. The issue? It’s under 15,000 metric tons of trash, and city officials aren’t keen on letting him dig up a decade-old mess.

He’s tried everything: offering the city a cut, proposing robot dog excavators, and even suing for access. Every plan has been rejected, but with the landfill nearing capacity, Howells is hoping his $700 million treasure hunt finally gets the green light.

MARKETS

*Stock data as of market close*

  • Wall Street took a hit Wednesday after hotter-than-expected inflation data threw cold water on rate cut hopes. The Dow fell 0.5 percent, the S&P 500 slipped 0.3 percent, and the Nasdaq barely stayed positive as traders braced for a longer fight against inflation.

  • Treasury yields surged past 4.6 percent, signaling shifting expectations on Fed policy. Powell’s testimony did little to ease concerns, leaving investors to reconsider just how soon rate cuts might actually happen.

STOCKS
Winners & Losers

What’s up 📈

  • Upstart Holdings surged 32% after issuing stronger-than-expected Q1 guidance of $200 million in revenue, surpassing the $193.8 million consensus estimate. ($UPST)

  • CVS soared 15% following a Q4 earnings beat, posting adjusted EPS of $1.19 vs. $0.93 expected, alongside higher-than-anticipated revenue of $97.71 billion. ($CVS)

  • Gilead Sciences gained 7.46% after exceeding Q4 expectations on both the top and bottom lines and raising its dividend. ($GILD)

  • BYD rose 8% as investors celebrated the automaker’s move to offer driver-assistance technology for free in vehicles priced under $10,000. ($BYDDF)

  • Baidu climbed 4.36% on reports that it plans to release the latest version of its AI model, Ernie 5.0, later this year. ($BIDU)

  • Alibaba popped 4.92% after reports indicated Apple is partnering with the company to bring AI features to iPhone users in China. ($BABA)

  • DoorDash added 4% after exceeding revenue expectations in Q4, reporting $2.87 billion in sales vs. $2.84 billion estimated. ($DASH)

What’s down 📉

  • Vertiv Holdings dropped 10% after issuing a softer-than-expected Q1 earnings forecast of $0.57-$0.63 per share vs. $0.63 expected. ($VRT)

  • Zillow tumbled 9.40% following weak Q1 guidance, projecting revenue between $575M-$590M, below the $599.8M consensus estimate. ($Z)

  • Lyft slipped 8% after missing Q4 gross bookings expectations and providing weaker-than-anticipated Q1 guidance. ($LYFT)

  • Avis Budget Group fell 7% after reporting a Q4 net loss of $2 billion and revenue of $2.71 billion, slightly below expectations. ($CAR)

  • Micron Technology declined 3% after stating at the Wolfe Semiconductor Conference that it had no updates on Q2 guidance but expects revenue growth in Q3. ($MU)

  • Kraft Heinz slid 3% after disappointing investors with weak sales volumes and a cautious outlook, citing shifts in consumer behavior. ($KHC)

EARNINGS
Robinhood Revenue Doubles, Fueled by Surge in Crypto Trading

Turns out, meme stocks were just the appetizer—Robinhood’s main course is crypto. The trading platform posted blockbuster Q4 earnings, with revenue surging over 100% to $1.01 billion, crushing Wall Street’s estimates. Profits also skyrocketed, hitting $916 million, a staggering leap from just $30 million a year ago.

This marks five consecutive quarters of profitability for Robinhood, a feat that once seemed unlikely for a company known for catering to retail traders. With user engagement and trading volumes back on the rise, Robinhood is solidifying its status as a dominant player in the fintech space.

Bitcoin, Options, and… Elections?

The biggest catalyst? Crypto trading revenue spiked 700% to $358 million, riding the wave of Bitcoin’s post-election surge past $100,000. President Trump’s pro-Bitcoin stance and his executive order on digital assets had traders piling in, while options trading also saw an 83% revenue jump to $222 million. "

The frenzy wasn’t just limited to Bitcoin—altcoins also saw a resurgence, as retail and institutional investors rushed back into the market. Robinhood’s unique position as a zero-commission trading platform made it the go-to place for traders looking to capitalize on the volatility.

Going Global, Pushing Boundaries

Robinhood isn’t just raking in cash—it’s expanding fast. The company launched US equity-options trading in the UK, set its sights on Asia with a Singapore base, and even tested event-based contracts tied to the Super Bowl before regulators stepped in. The firm has also been making aggressive moves into retirement and wealth management products, signaling a broader ambition beyond just retail trading. If Robinhood successfully executes its global expansion strategy, it could turn into a serious competitor to traditional brokerage firms on a much larger scale.

Wall Street Cheers

Investors loved what they saw—Robinhood’s stock jumped 16% in after-hours trading, bringing its 2025 gains to nearly 50%. With five straight quarters of profitability and an aggressive global push, Robinhood is proving that its post-meme stock era isn’t just about surviving—it’s about thriving.

The company is no longer just the scrappy upstart disrupting Wall Street; it’s evolving into a powerhouse with a diversified revenue stream and a clear path to sustained growth. As long as retail traders remain engaged and crypto volatility persists, Robinhood’s momentum doesn’t seem to be slowing down anytime soon.

NEWS
Market Movements

EARNINGS
Reddit Shares Tumble as Social Network’s User Growth Slows

Reddit’s stock just got a reality check, tumbling 19% after-hours as Q4 user growth came in weaker than expected. The platform pulled 101.7 million daily active users, missing Wall Street’s 103.8 million target. While revenue and profits soared, investors aren’t thrilled about Reddit’s slowing user growth, especially as it fights for ad dollars against giants like Meta and Google.

Blame It on Google

Turns out, Google giveth, and Google taketh away. A tweak to its search algorithm dented Reddit’s logged-out traffic, a crucial pipeline for new users. CEO Steve Huffman tried to downplay the impact, saying traffic has already rebounded, but the situation underscores just how much Reddit depends on Google to stay relevant.

Revenue Still Popping

On the bright side, Reddit’s revenue jumped 71% to $427.7 million, outpacing expectations. Profits tripled to $71 million, thanks to strong ad sales and some lucrative AI data deals with Google and OpenAI. The platform is pushing new ad formats—like sponsored AMAs—to reel in more advertisers, while its international growth is gaining traction.

Where to From Here?

Reddit expects $360M–$370M in Q1 revenue, slightly ahead of projections. But the bigger question: Can it keep growing without Google holding its hand? With AI-powered search and chatbots cutting into its traffic, Reddit is doubling down on AI tools and expanding globally to keep engagement up. Investors, however, want to see if Reddit can thrive on its own terms—or if it’s just another search-reliant social platform waiting for the next algorithm change to shake things up.

ECONOMY
Inflation Isn’t Taking the Hint So the Fed Won’t Either

Turns out, inflation isn’t quite ready to exit the stage. The latest Consumer Price Index report showed prices rising more than expected in January, throwing cold water on hopes for early Fed rate cuts. Core inflation—excluding food and energy—rose 0.4% from December, the biggest jump since March, while overall inflation ticked up 3% year-over-year.

Sticker Shock Hits Hard

Grocery prices led the surge, with egg prices cracking 15% higher thanks to a bird flu outbreak. Car insurance, airfares, and prescription drugs also saw hefty increases, proving that inflation isn’t just sticking around—it’s making itself comfortable. Housing costs, a key component of the Fed’s inflation gauge, continued to climb, further complicating the central bank’s path forward.

Powell Says ‘Not So Fast’ to Rate Cuts

Fed Chair Jerome Powell didn’t mince words during his testimony to Congress, saying, “We’re close, but not there on inflation.” Translation: don’t hold your breath for a rate cut anytime soon. Before this report, Wall Street was betting on at least two cuts in 2025, starting as soon as June. Now? September is looking more likely—if at all this year.

Investors reacted exactly how you’d expect: the S&P 500 slipped, bond yields spiked, and the odds of a March or May rate cut were basically erased overnight. Treasury markets are now pricing in just one quarter-point cut this year, a dramatic shift from expectations just weeks ago.

The Big Picture: With inflation staying sticky and the labor market holding strong, the Fed is in no rush to ease up. Add in Trump’s aggressive tariff push—which could fuel even more price hikes—and the Fed’s next move might not be a cut at all. The road to lower rates just got a whole lot longer.

Calendar
On The Horizon

Tomorrow

Tomorrow’s inflation report isn’t about what you pay—it’s about what businesses do. The Producer Price Index (PPI) measures wholesale inflation, tracking how much companies pay for materials before passing costs to consumers.

December’s PPI rose just 0.2%, a welcome slowdown, but after today’s hotter-than-expected CPI, another low print feels like wishful thinking. Meanwhile, earnings season rolls on with heavy hitters like Sony Group ($SONY), Datadog ($DDOG), Crocs ($CROX), Palo Alto Networks ($PANW), Airbnb ($ABNB), Honda Motor Co. ($HMC), Hertz ($HTZ), Hyatt Hotels ($H), Wendy’s ($WEN), US Foods ($USFD), Molson Coors ($TAP), Barclays ($BCS), Wynn Resorts ($WYNN), and Roku ($ROKU) set to report.

After Market Close:

  • DraftKings has been on a hot streak in 2025, climbing over 20% year-to-date. The twist? Bettors have been winning big too—so much so that management flagged an unusually high number of betting favorites cashing in last quarter. Tomorrow’s earnings will reveal whether that put a dent in profits or simply fueled more wagers. Consensus: $0.04 EPS, $1.4 billion in revenue. ($DKNG)

  • Coinbase has been riding the crypto wave, with Bitcoin topping $100,000 post-election and institutional adoption gaining momentum. Higher trading volumes should mean big earnings, but the question is whether the stock is getting too pricey—shares have soared 84% in the past year. If growth holds up, it may not matter. Consensus: $1.90 EPS, $1.75 billion in revenue. ($COIN)

NEWS
The Daily Rundown

  • 🚀 Elon Musk’s Bid for OpenAI Rejected Amid Growing Feud: Sam Altman swiftly dismissed Elon Musk’s $97.4 billion offer to buy OpenAI, calling it an attempt to slow down progress. The rejection escalates their long-running rivalry, which began when Musk left OpenAI years ago. With OpenAI seeking a $300 billion valuation, Musk’s bid could still influence how much control the nonprofit retains over the for-profit AI powerhouse.

  • 📉 Super Bowl Viewership Breaks Records with 127.7 Million Viewers: Super Bowl LIX became the most-watched event in U.S. television history, drawing 127.7 million viewers. The Eagles’ dominant win over the Chiefs peaked at 137.7 million viewers in the second quarter, while Kendrick Lamar’s halftime performance set a new record with 133.5 million viewers.

  • ⚖️ Shopify Shuts Down Kanye West’s Yeezy Store Over Nazi Symbol: Shopify took down Kanye West’s Yeezy website after he sold a $20 t-shirt featuring a swastika. The controversial sale followed a bizarre Super Bowl ad directing viewers to the site. The move sparked debate about Shopify’s content policies, as the company has been criticized for allowing other controversial stores to remain active.

  • 🔍 Italy Cracks Down on Sicilian Mafia, Arresting 160: Italian authorities launched their largest anti-mafia operation in decades, arresting 160 members of the Cosa Nostra. The sweeping arrests stemmed from an extensive wiretap investigation and mark a major blow to organized crime networks in the country.

  • 📉 Federal Budget Cuts Threaten NIH Research Grants: The National Institutes of Health will implement major cuts to research overhead funding, reducing grants by $4 billion. Scientists warn the cuts could stall medical advancements and hurt economies reliant on NIH-funded research.

  • 📖 Book Industry Debates Whether to Scrap Cover Blurbs: Publishing giant Simon & Schuster announced it would no longer require authors to secure blurbs for their books, arguing they prioritize connections over talent. Critics say blurbs help booksellers and reviewers filter through the crowded market.

  • ❄️ Worst Flu Season in 15 Years Hits U.S.: The CDC reports at least 24 million flu cases and 13,000 deaths this season, marking the worst flu outbreak since 2010. Experts believe a combination of a severe strain and relaxed precautions is driving the surge.

  • ⚠️ Gaza Ceasefire in Jeopardy as Netanyahu Issues Ultimatum: Israeli Prime Minister Benjamin Netanyahu warned Hamas to release hostages by Saturday or face resumed military action. Hamas has accused Israel of violating the ceasefire by delaying aid shipments, while Egypt and Qatar scramble to salvage the truce.

RESOURCES
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